Italians may return for lean Enterprise

ENTERPRISE Oil chief executive Sam Laidlaw promised to 'deliver shareholder value' by lifting oil output 7% a year. But it fell 14% last year, making it more difficult to fight off Italy's ENI if it returns with a generous bid after being rejected last month.

Laidlaw is cutting HQ staff from 300 to 200, will scale back costly deep water wells, ask Innogy to market his gas, and will pull out of Iran unless terms improve. But he also plans to expand in the Gulf of Mexico, Brazil and North Africa, with a target 13% return on capital. Big investors' patience may run out first.

Last year, net profits fell from 2000's record £407m to £274m with dividends up from 8p to 8.5p. A drilling rig dispute cost £33m.

Laidlaw sees 'huge upside' in the North Sea, Italy and Brazil where he is buying oil assets at an 'attractive' £2.10 a barrel. Enterprise's £2.9bn market value prices its own reserves at £2 a barrel, which may keep ENI hungry.